DONETSK, Ukraine -- The pro-Russia militants who stormed City Hall here Wednesday suggest one serious challenge for the Ukrainian government -- a deepening insurrection by separatists. But the government is also confronting another major hurdle in the restive east.

A credibility problem.

"We don't trust them," Ilya Vladymynouvch, a 43-year-old resident said of the country's interim leaders in the capital, as he pushed his infant son in a stroller in the gardens behind City Hall.

Scenes of armed occupation unfolded Wednesday across eastern Ukraine. Besides the takeover of City Hall in this city of nearly 1 million, separatists farther north flew the Russian flag over six armored vehicles that had fallen into their hands after Ukranian forces either voluntarily surrendered them or were strong-armed. The defense ministry said the losses came after a crowd of pro-Moscow residents, mingling with covert Russian operatives instigating violence in the east, had blocked an advance by pro-Kiev forces.

Yet contrary to the image presented, Vladymynouvch, like many residents here, is not eager for the region to follow in the footsteps of Crimea, which was annexed by Russia last month.

He considers himself solidly pro-Ukrainian. But the government in Kiev is managing to alienate citizens here, he said, with a little help from the West.

At a most dangerous and delicate time, just as it battles Moscow for hearts and minds across the east, the pro-Western government is set to unfurl economic measures to meet the demands of an emergency bailout with the International Monetary Fund. Both the government and IMF say they have no choice. Kiev is broke and desperate for cash, and Russia is no longer seen as a viable benefactor. And no matter how much they publicly offer their unequivocal support for Kiev, the IMF and Western governments that have pledged up to $27 billion in loans simply refuse to toss their money down the black hole of corruption and waste that is the Ukrainian economy.

But especially here in the east, the impact is hurting the government's popularity among an already skeptical audience.

Residents here are bracing for the worst. A rollback of long-generous subsidies on natural gas will jack up the rate consumers pay on their heating and cooking bills by roughly 63 percent next month. Approximately 24,000 state workers and 80,000 policemen nationwide are set to be laid off. Taxes on vodka, beer and cigarettes will soon go up. Changes in property tax calculations mean many Ukrainian homeowners will soon be paying more.

A demand for Ukraine to end its currency peg to the dollar, meanwhile, has allowed a sharp devaluation of the hryvnia that forced the Central Bank to raise interest rates this week. Among the effects of a weaker currency: Prescription drug prices have soared because high quality medicines here are imported from abroad.

IMF managing director Christine Lagarde said earlier this month that Ukrainians must learn to help themselves. "If there is that collective drive to eliminate corruption, to establish good governance, to have good procurements, to have true prices for energy and to own their economic destiny," change "will happen," she told euro news.

IMF demands are rarely popular, and countries around the globe from Argentina to South Korea to Greece have felt their sting.